SUMMER TRAINING REPORT

ON

“IMPACT OF PERFORMANCE APPRAISAL”

AT

“ABB INDUSTRIES LIMITED”

Submitted in partial fulfillment
of the requirement of degree in
MASTER OF BUSINESS ADMINISTRATION
OF

YMCA UNIVERSITY
SESSION : 2017 – 2019

Submitted to: Submitted by:

Controller of Examination VISHANU PRAKASH
YMCA University Reg. No.: __________
Roll No.: __________

ADVANCE INSTITUTE OF TECHNOLOGY AND MANAGEMENT

PALWAL

1
 ACKNOWLEDGEMENT
I express my sense of profound gratitude to the Management of “ABB
Industries Limited”. For giving me this opportunity to conduct a study on
Impact of Performance Appraisal in their esteemed organization.

My sincere thanks to Mr. Vijya K. Mathews (Human resource Manager), ABB

Industries Limited. For permitting me to pursue this project.

I would like to express my gratitude to Mr. Rahul Shrivastava (Sales Manager),

ABB Industries Limited. For providing his valuable time, suggestions and
support for completing my project work successfully.

I am extremely grateful to Mr. Rajul Gupta, Lecturer, Advance Institute of

Technology and Management. For his/her support during the preparation of
the project report. His/her patience and invaluable guidance have proved to
be very precious without which project would not be completed.

Lastly, I am indebted to the friends and will-wishers who have extended their
support to me during the project.

VISHANU
PRAKASH

2
 10th August, 2018

TO WHOMSOEVER IT MAY CONCERN

This is to certify that Mr VISHANU PRAKASH student of MBA final year,

Advance Institute of Technology and Management, Palwal has

successfully undergone his eight weeks summer training with us from

11th June to 10 August, 2018 and submitted the report.

He has completed his training successfully with full dedication.

We wish him all the best in his future assignments.

For ABB INDUSTRIES LIMITED

Auth. Signatory

3
 DECLARATION

I, VISHANU PRAKASH student of MBA of Advance Institute of

Technology and Management, Palwal hereby declare that the training

report entitled “Impact of Performance Appraisal” at ABB Industries

Limited is an original work and it has not been submitted for any other

degree. The feasible suggestions have been duly incorporated in

consultation with supervisor.

(Student’s Signature)

Date:

Faculty Mentor’s Signature

Date:

4
 TABLE OF CONTENTS

Chapter 1 : Company profile

Chapter 2 : Review of Literature

Chapter 3 : Research Methodology

Chapter 4 : Swot Analysis

Chapter 5 : Synopsis

Chapter 6 : Conclusion

Chapter 7 : Limitation

Chapter 8 : Suggestions

Chapter 9 : Annexure
Bibliography
Questionnaire

5
 CHAPTER-1

COMPANY PROFILE

6
 COMPANY PROFILE
ABB (ABBN: SIX Swiss Ex) is a pioneering technology leader in power grids, electrification
products, industrial automation and robotics and motion, serving customers in utilities,
industry and transport & infrastructure globally. Continuing a history of innovation spanning
more than 130 years, ABB today is writing the future of industrial digitalization with two
clear value propositions: bringing electricity from any power plant to any plug and
automating industries from natural resources to finished products. As title partner in ABB
Formula E, the fully electric international FIA motorsport class, ABB is pushing the
boundaries of e-mobility to contribute to a sustainable future. ABB operates in more than
100 countries with about 147,000 employees. www.abb.com

Who we are – Group structure

ABB is organized into four divisions according to the customers and industries we serve.
These are described in more detail in the section entitled Our businesses.
 Power Grids
Electrification Products
Industrial Automation
Robotics and Motion

Below are links to listings of key personnel, with biographical information for members of
the Board of Directors and for members of the Executive Committee.

Why do we need a code of conduct? ABB is a global leader in power and automation
technologies. Our company in its current form was created in 1988, but our history spans
over 120 years. Since our inception, our reputation has been built on certain qualities and
values, one of the most important of which is integrity. A culture of integrity is a
prerequisite for a world-class business. Many valuable customers choose to do business
with us in part because they know ABB behaves in a responsible and ethical way, and that
we respect the needs of individuals, society, and the environment. The Code of Conduct
defines how we conduct ourselves at ABB, and it has played a critical role in helping us earn
our reputation. Every ABB employee, in every location, and at every level, including board

7
members, directors, and officers alike, is bound to live up to the letter and the spirit of the
Code even if it means losing an important contract or missing a business target. The Code of
Conduct is more than an acknowledgment of the rules. It reflects a personal commitment to
take responsibility for our actions and always to work with integrity. At ABB, performance is
measured not only by the results achieved, but also how these results were achieved. This is
why our stakeholders can rely on the fact that our services, operations, and daily business
are based on ethical behavior. ABB strives for a culture of mutual respect that encourages
the exchange of views at all levels of the organization. By fostering open dialogue and
playing an active role in our community, every ABB employee can make a difference. Why
do we need a Code of Conduct? Code of Conduct 5 ABB’s strength and future success
depends on its reputation as a trusted and reliable business partner. We all have a role to
play in safeguarding that reputation. If you are ever in doubt about how to behave in any
situation, please ask your manager, human resources representative, or local integrity
officer for guidance. Confidentiality and non-retaliation are our commitments to you. I
expect that you will take the time to read through the Code of Conduct and do your part to
exemplify our high standard of integrity at ABB. Ulrich Spiesshofer CEO ABB Ltd

Tone from the Top

Don’t Look the Other Way - “A culture of integrity is a prerequisite for a world-class
business. Many valuable customers choose to do business with us in part because they
know ABB behaves in a responsible and ethical way, and that we respect the needs of
individuals, society, and the environment. At ABB, performance is measured not only by the
results achieved, but also how these results were achieved. This is why our stakeholders can
rely on the fact that our services, operations, and daily business are based on ethical
behavior.” CEO Ulrich Spiesshofer

ABB’s commitment to integrity – ABB sets high standards of integrity and compliance which
are expected of every employee and in every country where it does business – ABB uses a
systematic approach, designed to foster a culture of integrity and compliance – This is done
through leadership and business accountability, supported by strong tools and processes,
and a zero tolerance policy for violations

8
Program fundamentals: prevent, detect and resolve March 26, 2018 Slide 4 The
fundamentals of the ABB integrity program are designed to PREVENT, DETECT and RESOLVE
any potential concerns

Preventing integrity concerns: key employee messages – ABB must not, should not, and will
not break the law – We compete and win only by playing by the rules – There is no place in
ABB for anyone who breaks the rules. We have a zero tolerance policy which is rigorously
enforced – We are proactive about integrity and compliance through ongoing training,
internal surveys and resources such as the Business Ethics Hotline

9
Commitment
We are committed to a high standard of integrity which is expected of every employee and
in every country where we do business.
With hard work and a clear commitment from ABB's top management at headquarters and
across our regions and divisions, ABB has seen the positive impact that a robust compliance
and integrity program and a strong culture of integrity can have on the long-term success
and sustainability of our company.
Integrity is a top priority at ABB
We have developed and implemented a systematic approach designed to prevent, detect,
and resolve any potential integrity concerns. This is supported by tools and processes and a
zero tolerance policy for any violations. Our integrity program has created an environment
where all of our employees can be open about identifying risks, asking questions, and raising
concerns.

Integrity leadership involves every dimension at ABB

At ABB, integrity begins with leadership, responsibility and accountability. The tone from the
top is clear: we are committed to integrity and we walk away from non-compliant business.
Recurring integrity messages from our CEO and other senior leaders in videos, articles and
letters, serve to reinforce our commitment to doing business without breaking the rules.

But integrity leadership does not stop at the top. Our integrity program relies on local
management to lead by example. All local business unit managers have to regularly lead
discussions about integrity issues to ensure that the ethics message comes from the same
person that sets the business targets: integrity is the business of the business.

With support from top leadership, local leadership, committed integrity resources, and
partner resources (like Human Resources and Sustainability Affairs) throughout the
company, we are able to foster a strong and sincere culture of integrity.

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Standards
ABB is committed to fostering a culture where integrity is woven into the fabric of
everything we do. We want integrity embedded in our people, our businesses and
processes. This means acting responsibly as individuals and as a company.

When you work with integrity, non-compliant behavior is simply not an option.

We want integrity embedded in our people, our business, and our processes. In the
following sections, learn more about the standards of behavior that we expect of our
employees and our business partners.

Multiple reporting channels

Employees are not just encouraged, but are required to speak up and to report any
suspected or observed violations of the law, the ABB Code of Conduct, or if they are asked
to do something that might be a violation.

Reports may be made to a supervisor, a regional or country integrity officer, the chief
integrity officer, or the ABB Business Ethics Hotline.

11
Training and communications
Our integrity program has, as one of its key components, a strong training and
communications component. Here you will learn more about our e-learnings, our face-to-
face trainings, communications activities, and the key messages in those communications.
Additionally, you will find the link to the ABB Integrity Culture and Risk Survey performed by
KPMG.

Resolving issues
ABB applies zero tolerance and takes the appropriate disciplinary action
ABB is focused on preventing, detecting and remediating integrity concerns. We enforce a
strict zero tolerance policy for violations of the law or the ABB Code of Conduct, and we will
take the appropriate disciplinary action – including termination of employment – against
employees who violate them.

Anti-bribery reviews of business units and countries globally are conducted frequently
throughout the year. Each review includes examination of business processes, accounts and
balances, and tests transactions to assess robustness of controls and identify possible
violations. The anti-fraud program is also monitored by internal audit who regularly
evaluates fraud risk exposure and developing trends. This is a cross functional analysis of 21
program elements and the response plan to prevent and detect potential fraud.

The event was hosted by our CEO Ulrich Spiesshofer and CFO Eric Elzvik as well as other
members of the senior executive team.
On this page you will find all the material from the event which was made available during
the course of the day.

12
Contact centers
Do you have an inquiry but do not know where to turn?
Then contact one of our centers by the web inquiry form, online chat, telephone or email
listed below.

FARIDABAD BRANCH :
Local name Regional Office North
Street address 14 Mathura Road
Additional address information Plot No - 14 , Mathura Road
Postal address P.O. Amar Nagar
City Faridabad
Zip/Postal Code 121003
State/Province Haryana
Country India

Fax

Fax +91 129 227 9692, +91 129 227 5019

To find out more information about a specific country contact center simply click on the
country name.
Contact International
Local phone number E-mail address
Center number

Argentina 0800 222 6700 +54 11 4229 5800 contact.center@ar.abb.com

Australia 1800 222 435 +61 2 9738 2277 contact.center@au.abb.com

Belgium 0800 85169 +32 800 85 169 contact.center@be.abb.com

Brazil 0800 014 9111 (toll-free) +55 11 36 889 004 contact.center@br.abb.com

Canada 1-800-435-7365 (1-800-HELP-365) +1 44 05 857 804 contact.center@ca.abb.com

Chile 800 487 300 (toll free) +56 22 471 4378 contact.center@cl.abb.com

China 800-8209696, 400-8209696 +86 21 33 18 4688 contact.center@cn.abb.com

Colombia 01 8000 522 226 +57 1 378 9349 contact.center@co.abb.com

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Czech
800312222 (toll free) +420 59 74 68940 contact.center@cz.abb.com
Republic

Denmark 44504450 +45 4450 4450 contact.center@dk.abb.com

Ecuador 1800 222 328 (1800 ABB 328) +593 2 399 4191 contact.center@ec.abb.com

Egypt 19290 +20 2 2625 1774 contact.center@eg.abb.com

Estonia 5680 1800 +372 5680 1800 contact.center@ee.abb.com

Finland 0102221999 +358 10 22 219 99 contact.center@fi.abb.com

France 0 810 020 000 +33 1 34 40 2581 contact.center@fr.abb.com

Germany (0621) 381-3333 +49 621 381 3333 contact.center@de.abb.com

Indonesia 21 255 955 99 +62 21 255 955 99 contact.center@id.abb.com

India 1800 420 0707 +91 80 67 143 000 contact.center@in.abb.com

Italy 02 2415 0000 +39 02 24 150 000 contact.center@it.abb.com

Japan 03-4523-6170 +81 34 523 6170 contact.center@jp.abb.com

Kuwait 22282337 +44 203 788 2825 contact.center@kw.abb.com

Luxembourg 8002 2211 +35 249 3116 contact.center@lu.abb.com

Malaysia 1800 222 2273 (1800-ABB-CARE) +60 356 284 235 contact.center@my.abb.com

Mexico 01-800-5222 365 (01-800-5ABB 365) +52 44 48 707 590 contact.center@mx.abb.com

Netherlands 0800 9103 +31 800 9103 contact.center@nl.abb.com

New Zealand 0800 464 222 +64 7 850 2721 contact.center@nz.abb.com

Norway 22 87 2000 +47 22 87 2000 contact.center@no.abb.com

Oman 80074115 +44 203 788 2823 contact.center@om.abb.com

Panama 8002223 +507 395-8698 contact.center@pa.abb.com

Peru 0 800 20004 +51 1 415 5212 contact.center@pe.abb.com

Poland 2222 3 7777 +48 2222 3 7777 contact.center@pl.abb.com

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Qatar 8000034 +44 203 788 2824 contact.center@qa.abb.com

Russia 88005002220 +7 495 777 0013 contact.center@ru.abb.com

Saudi Arabia 920010301 +966 92 001 0301 contact.center@sa.abb.com

Singapore 62 22 7778 +65 62 22 7778 contact.center@sg.abb.com

Slovakia 0800 700 101 +420 597 468 940 contact.center@sk.abb.com

South Africa 010 202 6995 +27 10 202 6995 contact.center@za.abb.com

South Korea 1588 9907 +82 1588 9907 contact.center@kr.abb.com

Spain 901 760 762 +34 90 17 607 62 contact.center@es.abb.com

Sweden 021-325000 +46 21 32 5000 contact.center@se.abb.com

Switzerland 0844 845 845 +41 84 48 458 45 contact.center@ch.abb.com

Taiwan 07 335 5066 +886 7 335 5066 contact.center@tw.abb.com

Turkey 0850 333 1 222 (0850 333 1ABB) +90 850 333 1 222 contact.center@tr.abb.com

Unites Arab
800 0444 7658 +44 203 788 2822 contact.center@ae.abb.com
Emirates
United
1-800-435-7365 (1-800-HELP-365) +1 44 05 857 804 contact.center@us.abb.com
States

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 CHAPTER-2

REVIEW OF LITERATURE

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 REVIEW OF LITERATURE
Introduction:
This chapter will discuss the critical importance and understanding of
performance appraisal systems in the banking industry of Pakistan. Moreover,
this chapter will highlight the need of the study, aims and objectives of the
study and also introduction to the key terms that has significant importance
throughout the research paper.

Understanding Performance Appraisal:

In the past few decades, organizations were very concerned about the
development and orientation of their employees and also pondering on
performance management (Murphy & Cleveland, 1991). Now, Organizations
are following the new patterns of working and doing jobs to adhere the aims
and mission of it. To fulfil this new modernized concept of fast and
technological revolution, they are realizing the importance and
implementation of new methods of performance management (Cardy &
Dobbins, 1994).
Organizations have indentified the importance of performance appraisal and it
has been found in the cases of all big multinational companies that they have
implemented the performance appraisal systems to enhance the productivity
of their employees. There are varieties of different perspectives that evident
the importance of performance management and its measurement (Whitney,
1994). Organization should present true and fair views of performance
appraisal to gain trust of the employees, their loyalty and job satisfaction are
the main core of any organizational success (Robinson & Rousseau, 1994).
Through rational performance measurement, Organization's management can
get the maximum reliance of employees.

17
This research papers aims to explore the performance appraisal system within
the banking sector of Pakistan and its comparative study with JS (Jahangir
Siddqui) bank. This research study will also explore the effects of performance
appraisal on the employees considering motivation, job satisfaction and
employee loyalty as key factors in HR functions.

The Research Topic:

To explore the role of performance appraisal system in HR function within the
banking sector of Pakistan.
Aim:
This research aims to investigate the role of performance appraisal system and
its effect on employees considering motivation, job satisfaction and employee
loyalty as the key factors in HR function within the banking sector of Pakistan
and comparative study with JS Bank.
Objectives:
 What is performance appraisal?
 What are different performance appraisal systems?
 How appraisal system interlinked with motivation and employee loyalty
within banking sector of Pakistan?
 What are different problems with performance appraisal system?
 What are different strategies in HR department to enhance productivity?

Rational of Study:
The system that identifies the Performance evaluation and review is called
Performance Appraisal system. Performance appraisal system highlights the
individual and group performance over the period of time and reviews for the
promotion and raise in monetary funds.

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To get the real meaning of performance appraisal system can be elaborated to
the concept of performance management. Performance Management can be
defined as:
“An approach to create shared vision of the purpose and aims of the
organization, helping each individual employee understand and recognise their
in contribution to them, and in so doing manage and enhance the performance
of both individuals and the organization.” (Fletcher, 1992)

Performance management is a process where it describes the performance of

individuals that shapes a group and become the collective success of the
organization with the set of objectives, time period, reviewing the
performance and recognition of the performance with rewards (Connock,
1991). The main objective of performance management is to show the real
picture of the employees performance over a period of time and this can be
achieved through framed standards (Beaumont, 1993).

In the Performance management, the appraisal system is the most significant

part where it defines a structural and formal system that helps the manager
and subordinate to interact with each other to evaluate performance. This
interaction usually comes into process annually of semi-annually in shape of
some structured interview or questionnaire. In this process, supervisor
examines the performance of subordinate where supervisor identifies
strengths and weaknesses and also highlights the area of improvements
(Connock, 1991).

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Importance of Performance Appraisal:
The managers are aware of the importance and criticality of performance
appraisal, and its ultimate affect on the motivation, loyalty, job satisfaction
plus its has a big affect on the growth and success of the organization, so while
documenting, communicating, and describing the job particulars, they are
more concerned. It has been noticed that in the current time, job performance
systems have improved a lot, but still the outcome shows that it has a negative
impact on the job satisfaction and motivation of the employees if it is not
appraised systematically (Robert, 2002). So, it results in counter of an
organization that employees are demoralized and also lose their loyalty, which
affects the organizational aims and objectives. Human resource officials use
performance appraisal for decision making such as planning payments and
salary scale of the employees, they also determine what professional
developments are needed to equip their employees with a proper feedback.
Performance appraisal can also help the officers to decide what are the factors
that can be employed to increase the productivity of employees (Natalie & Ann
2005).

As performance appraisal encourages the good performers, on the same hand

performance appraisal also highlights the poor performers and tells about their
weak areas and it helps the management to remove the leaning hurdles and
makes them to achieve the set objectives and aims. This system also identifies
the employee who needs guidance and counselling from management to
improve their performance at work. Organization believes that performance
appraisal is the best tool to see the level of employees and their performances
and making the decision about their rise in salary, promotions, demotions and
penalties (March, 1982).

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Factors of Performance Appraisal:
There are many factors influencing performance appraisals systems at work.
Internal and external factors always play an important role in appraising the
employees. Internal factors could be labour unions, management's attitude,
the employee's behaviour and their stance in the direction of work. External
factors are legislations in relation to the employees. Labour union always get
into the matters of employees well being at work and also in their personal
lives so that they can give their full at work. But some time it has a negative
impact on performance appraisal and the management to give promotion or
rise in the salary on the bases of seniority (Isaac, 2001). Internal factors can
also affect the performance appraisal in shape of bad corporate culture that
can be a big hurdle in the performance management. The main objective is to
set specific goals and make framework of getting those objectives. For all this,
management should inform the employees that what is expected from their
jobs and what should they do to make hundred percent out of it. At the end
management sees and evaluates on the whole performance and also
communicates these efforts to employees. This communication also develops
relationship between employees and supervisors (Isaac, 2001).

There are different techniques and methods used for the performance
appraisal and it gives an outline to measure the performances that are in use
of different organizational and it also varies from industry to industry. There is
no hard and fast rule to use specific performance appraisal system, but it is
always suggested to use the same performance criteria within one
organizational and it applies to all of the employees. These models and
techniques include, Six Sigma, Balance Scorecard, 360 degree feedback, etc.
These models and techniques to measure the performance is widely in use of

21
many MNC's and local organizations, in the banking industry of Pakistan and in
JS bank. While designing performance appraisal, management should keep in
view the nature and type of the business to conduct these performance
management techniques. In the performance management, 360 Degree is
common and Six sigma is the operational management technique; both leads
to performance appraisal measurement where the HR function is able to
appraise and it involves the motivational factors, employee loyalty, and job
satisfaction aspects. Extensive and appropriate use of these techniques will
make the appraisal much unbiased (Natalie & Ann 2005). Employee's
motivation and job satisfaction can never push aside, as these are elementary
aspects of any Job. In the process of appraisal system, an employee always
expect some feedback from other employees which gives him motivation and
the satisfaction from the job done, so these are the complementary part of any
job. When any employee is appraised, then he always get the communication
and feedback of that appraisal and it actually indicates the level of satisfaction
of job the employee has plus the loyalty he has for the organization (Robert,
2002). In the banking industry, as the recession hits and many of the
employees being fired, so at the time of performance appraisal, employees are
so dissatisfied as they don't know when they are going to be part of sacked list
of employees, keeping in this view, the performance appraisal system plays
role in the Hr department to indicate the key factors such as motivation, job
satisfaction and loyalty (Caruth and John 2008).

Performance Appraisal:
The process in which human resource management department obtains,
analysis and makes decisions on the performance of an employee over a
period of time is called Performance Appraisal Process and the methods which

22
are used to appraise the employees are called Performance Appraisal Systems
(Yee 2009). The main objective of performance appraisal system is to focus on
the performance, key attributes of the job, what is the improvement in the
performance and the proportion of the performance that the employee will
make in future in the productivity of the organization. It aims towards the
employee and it's his performance over the period of time (Dobbins, 1994).
In the field of human resource management a prominent name of Flippo
(1999) says that

"Performance appraisal is the systematic, periodic and an impartial rating of an

employee's excellence in the matters pertaining to his present job and his
potential for a better job." (Flippo, 1999)

This systematic process allows the management to look into employee's

activities in last fiscal year or the performance time periods and analyse where
it is falling, what improvement has he made and what is the future planning
regarding job and activities.

Management should educate the employees about their individual goals and
share the aims and objectives with the organization. Employees should have
the knowledge and freedom to participate in the decision making process.
Here, if the management has the full corporation of the employees and on the
same hand if employees coordinate with management then this performance
and participation can actually helps in the appraisal for the next period. In all
this, the right of expressing of opinion will certainly adds to their performance
(Beach, 1995).

23
Performance appraisal systems are the powerful tool to measure the
performance of an employee and to issue or offer the rewards on that quality
performed job. This process allows the management to evaluate the
achievements and contribution to the success and productivity of the
organization to get the overall organizational aims and objectives (Dobbins,
1994). Moreover these systems are standardising for all the employees.

Performance appraisal is a system in which HR managers measures the

performance of the employee, either he is performing his job rightly, is he
achieving what organization wants from his job, what is his behaviour and
attitude towards his job, either he is showing positivity towards his job, is he
the right employee for the right job, as all this comes under the HR function of
an organization (Randhawa 2007). The main objective of performance
appraisal is to make sure that employee‘s performance is up to the mark, to
communicate this job performance measurement makes the employee enable
to enhance his productivity and cover his loopholes where he is lagging behind.
The main idea behind performance appraisal is to insure that organizational
goals are being met, because meeting organizational objective is an individual
as well collective effort. Strategic objectives on banking sector and any
financial institution are to multiply their profits by gaining the top performance
from its employees. By monitoring employee's performance, they actually see
what the criticality of the importance is and the effect that job is making on the
organizational objectives. An effective performance appraisal must have
collaboration between the management and the subordinates. An employee
should work according to the job description, which is decided by the
immediate manager. By doing this, there will be no conflict between the
management and the employees (Propper, & Wilson, 2003).

24
The objective of performance appraisal is to influence the employee's job
performance with a systematic process appraisal, what are the major impacts
on the employees to get the certain level of motivation to improve the
productivity of the organization as well as the job satisfaction (Natalie & Ann
2005). In the past, the sole purpose of performance appraisal was just to
calculate the financial position of the company, either it has made some
progress in terms of monetary growth, what influence it has made on the
department growth and what are the affects of performance on organizational
objectives. But now, things have changed. Now researchers are seeing beyond
the monetary terms, they are not discussing the financial aspect but they are
measuring the job performance in terms of employee's job satisfaction and his
level of motivation, because ultimately the manpower of an organization is its
labour force. If this labour force is getting what they want, then they will
perform according to the job description they have with them within their
departments.

History of Performance Appraisal:

Performance appraisal has a brief history starting from earth 20th century
where the need of performance appraisal was felt and some measures
developed. This history shows that Taylor (1964) who is the revolutionary
person in times and motion studies brought the real sense of performance
appraisal and performance measurement. But in the modern human resource
management it can be seen that the thread of performance measurement is
linked with the Second World War. This tells the history that it is not more than
sixty years ago. Yet the guru of human recourses says that the art and
procedures of performance measurement and appraisal is very ancient art and
people of old times had some tools to appraise their employees on the basis of

25
activities and job they performed. On these historical felt notes it can be said
that performance appraisal management is the world's second oldest
profession too. Here Dulewicz (1989) says that “It is a basic human tendency to
make judgements about those one is working with, as well as about oneself."
If the management has a concept that performance and its appraisal is
inevitable then it will be wrong that performance of an employee cannot be
judge in advance. In the absence of a structured appraisal system then it will
ultimately affects the performance of employees, the productivity of the
organization and moreover the reputation of the organization in the industry.
It will de-motivate the employees, they will lose satisfaction from their jobs
and loyalty with the organization will be most likely finished and labour turn
over will increase. One serious offence can be seen in the absence of appraisal
system that organization can go unlawful, harassing the employee and unfair
judgement on their performance. Consequently, it helps the management and
employees to go lawful, fair and accurate with the performance over the
period of time (Murphy, 1989).

Benefits of Performance Appraisal:

Where performance appraisal allows the employees to get the monetary and
non monetary rewards from the management, here it also give the most
significant benefit for employees that it gives the chance to get reasonable
time for one to one discussion on the performance over the period of time.
This discussion between employee and supervisor allows discussing the main
issues that are hurdle in the performance and work concerns addressed. It can
observe from all over the world organizations, the feedback of performance
appraisal says that it creates a strong bond between subordinate and
supervisor only if the appraisal is conducted properly and fairly. This process

26
also gives the opportunity to employees to review their performances and
discuss the issues and difficulties they are facing in the work and also it gives
the path to gain the aims and objectives in the future time. This interaction of
subordinates and supervisors give the opportunity to help the future goals.
Therefore it enhances the productivity. So, this process gives the best time to
employees to have chat with the supervisors without any hindrance and
instruction (Orpen, 1997). The importance of this process should not be
underestimated as this is the integral part of performance appraisal system.
Moreover this process allows the supervisors and employees to discuss the
future targets and, training and rotation need orientation and development, if
needed. In this discussion, the supervisors and the subordinates discuss the
various problems about the present as well as the absent working skills, career
development and what is to be done in the future (DYCK, 1997). Here,
supervisor highlights the key skills of the subordinate and makes or arranges
for the future career inspirations. This discussion can be useful to measure the
productivity of the organization, for the recruitment and orientation process.
For example, the feedback can indentify how employees are performing those
who hired in the past two years and so. Appraisal data can also tell how well
the recruiting strategies are working, what developmental process are good
enough and what the effectiveness of employees is. Performance appraisal
process could be a data sheet highlighting the overall performance of all
employees; telling has productivity improved, remains same or fall. Evaluation
is the ongoing process and its run throughout the year but some clash can be
noted in the evaluations and developmental process but in a nutshell it's a
process of evaluating, analysing and giving feedback of that process
(THOMPSON & DALTON, 1970).

27
Basic purpose of Performance Appraisal:
Performance appraisal systems have the two main elements in it; one is
evolution of the performance and the feedback of the evaluated performance.
The main objective of performance evaluation is to define the gaps in the
actual job and job performed. This gap creates when the employee is not
working on the standard level and doesn't meet the expectation of the
organization (ANTHONY, 1986). The main objective of feedback is to inform the
employee about his performance and the quality work he is producing but this
feedback doesn't flow in a one direction and the supervisor of the appraiser
also gets the feedback from the employee to resolve the job issues, if have. To
get the real sense of performance appraisal system is to look at the whole
process on different angles so that it can create a meaningful difference in the
organization. These different angles could be: from employees point of view
and organization's point of view (ANTHONY, 1986).

From employee's point of view it can be unfold as:

i. What does the organization want me to do?
ii. What are my loopholes? And what I have done remarkably well?
iii. What help will be given by the organization for my own improvements?
iv. What is the reward of my good performance?

Performance appraisal system has always an integral part of HRM and this
research will highlight the main issues within the systems and the rating of
employees. Rating the performance appraisal and giving the feedback is not an
easy task for the HR department, as the criteria of apprising is a complex job.
There are certain strategies underlying to make the traditional methods
accurate than it had been in the past and therefore the likelihood of correct

28
and affective appraisal will be increased (TOWNLEY, 1997). These strategies
can be considered as a practical training to the HR officials. New learning
techniques and methods should be true n fair for all set of employees,
transparent and should be computerized so there are no chances on
intermingled results which will remove the chances of favouritism. The main
tactics and objective of the performance appraisal is that it should be
conducted for the motivation of the employees with no negative aspect
associated with it, as it will decrease the morale of the employees. There
should be some reward or bonus announced so that this will be stimulation for
other employees and they will try to excel their performance too. Proper
communication and feedback session should be introduced so that the
employees come to know their loopholes (Natalie & Ann 2005).

Objective of Performance Appraisal:

Followings are the main objectives of performance appraisal.
 To review the performance of employees over the period of time.
 This review of performance, evaluator judges the actual performance
with the targeted performance standards and benchmarks.
 It also helps the management to control the organization targets
depending upon the performance of employees.
 It also creates healthy environment between employees and
supervisors.
 It indentifies the strengths and weaknesses of employees and also
suggests the various improvement plans by the management after
performance appraisal process.
 This process also allows the employees to get the proper training and
orientation of skills where they are lacking.

29
  To communicate the feedback with the employees.
 Give all information regarding the tasks and job responsibilities and also
clarifies all the tasks which are required from the employees.
 One of the objectives of performance appraisal is to judge the HR
function within the organization for smooth running of business.
 It also tries to removes the complaints of employees about the function
of organization, if have any.

Performance Appraisal &Employee Motivation and loyalty:

In the growing age of business and markets, human resource is the big asset of
the organization; if the organization is not keeping well with its labour work
force then it might get into trouble. As the employees are the main features of
the progress of the organization. In order to have productivity, employee
should be motivated and should be satisfied with their job and have loyalty
with the organization (EPstein,1992). HR professionals are making it possible to
motivate the employees with the performance appraisal systems by giving
them fair appraisals as per their performance over a period of time. It has been
noticed that there is a strong relationship between performance appraisal and
motivation, job satisfaction and loyalty (bonnie, 2002). Keeping aside the main
objectives of performance appraisal, it can be use as a mechanism to create a
completion between employees to get the job done with all the linked targets
and benchmarks (Robert, 1984).

It is also mandatory that employees gets the accurate performance appraisal

results to get motivate, if the feedback of appraisal is according to their
performance over the period of time that will be a great source of motivation
to them. Inaccurate performance can create dissatisfaction from job and

30
ultimately can affect the loyalty with organization. One employee always
expects that evaluator recognise his efforts and achievement in the
professional life and also support him to overcome on his failure and allows
the opportunity to make improvements in his performance in future (bonnie,
2002).
If the performance appraisal has some shortcoming in it and is actually creating
some discrepancy in the process, then it will affect the motivational level of the
employees and ultimately it will affect their efforts and the risk taking ideas for
the betterment of the organization. Also they will lose interest in the affairs of
the organization (Robert & Kim, 2007). Plus this de-motivation leads the
employees to the lack of loyalty and they will look other options of good job
and hikes in the rewards (bonnie, 2002).

Different performance appraisal systems:

There are different systems and methods for measuring performance and
appraising the employees. These methods and systems are categorised as the
traditional methods and the modern methods.
Traditional Methods:
In the traditional methods there are various systems to measure the
performance employees. In the traditional method of measurement
Behaviourally Anchored Rating Scale is widely used by many organizations
across the globe. In this system it focuses on specific behaviours, either
affective or ineffective performance is given by the employee. It involves
critical incident technique (CIT) and different combinations of rating scale.
However, in Graphic Rating Scale supervisor or evaluator simples checks the
different blocks in the appraisal form to measure the performance. Though this
a old technique to appraise the employees but broadly used method. Unlike

31
scaling system, in Essay Evaluation Method asks the managers, supervisor and
evaluators to write an essay or a descriptive narration about the strength and
weakness of the employees and also the overall behaviour towards the job.
This is a qualitative measure to appraise the employees. Another ranking
system is Performance ranking Method in which evaluator or supervisor rank
the performance of employee from best to worst. This method differs from
other methods as it compares the employee to employee but not with the
standards and benchmarks for performance measurement. In Critical Incident
Method (CIT), evaluators appraise the performance depending upon the
critical incident and the positives and negatives behaviours occur in the period
of time to measure the performance (Dessler, 2000).

Modern Methods:
There are different methods of performance measurement in the modern
times, 360 Feedback System and Management By Objectives (MBO).
360 degree feedback.

360 Feedback is a systematic technique which also known as the multi-rater

feedback system. In this method evaluator or the appraiser takes feedback
from all the people who are inter-linked with the person to be appraised. The
360 Feedback can be defined as:

“The systematic collection and feedback of performance data on an individual

or group derived from a number of the shareholders on their performance.”
(Ward , 1997)

This method of performance appraisal is detailed and comprehensive where

evaluator asks from all sources about the performance of the employee. In this

32
method all the sources are involved as: customers, suppliers/ vendors, team
member and colleagues, superiors, juniors, subordinates and all the other
parties who has link with the particular employee. These sources provide all
the information that is significant in the performance appraisal process
(Anderson, 1987).

There are four main parts of 360 feedback appraisal system:

a. Self appraisal
b. Superior's appraisal
c. Subordinate's appraisal
d. Colleagues' appraisal
The 360 Feedback systems can be an ongoing process throughout the year to
keep an eye on the performance and other's perception about the employees
and also it can be measured that how well employee is keeping with its
required tasks and responsibilities (Natalie & Ann, 2005). 360 Feedback is also
helpful for the managers and leaders to insight of their leadership and
managerial styles.

Management by Objectives' (MBO):

Performance appraisal's history can be trace from the guru of organizational
management, Peter Drucker on 1954. He has given the different theories of
management and introduced the main theme of Management by Objectives
(MBO). A process whereby the superior and subordinate managers of an
organization jointly indentify their common goals, define each individual's
major areas of responsibility in terms of the result expected of him and use the
measures as guide for operating the unit and assessing the contribution of
each of its members.

33
Process of Performance Appraisal:
Performance appraisal follows the systematic method to appraise the
employee so that it becomes a rationalize and fair process for employee
(Caruth & John 2008).
It has six main areas to look on, which are:
 Performance standard
 Communicating the standards and expectations
 Measuring the actual performance
 Comparing the actual performance with benchmarks
 Discussion on results
 Decision making.

Performance Standard:

This is the first step in performance evaluation process. It is mandatory to

make or set some standards and targets for the employees so that
performance can be measured and compared with the standards. This step
allows the supervisor and performance evaluator to make the criteria's to
judge the employees and keep an eye on the qualifying factors for those set
standards. Setting up performance standards is also mandatory to look on the
organization goals and objectives for the productivity of business (Caruth &
John 2008).

Communicating the standards and expectations:

After setting the performance standards and expected outcomes, the next
integral part of the Performance Appraisal process is to communicate those
standards to employees and educate them as to how to achieve the bench
marks. It is mandatory that employees should know the standards clearly and

34
have the idea on how to meet those. These standards will educate the
employee about their main responsibilities and job roles and what is expected
out of them. These standards should be communicated at the start of the year
so that employees should know what to do in future. Management can modify
or edit some of standards from the time to enhance the productivity but
employees consent will be taken by the management to do so (Caruth & John
2008).

Measuring the actual performance:

After communicating the bench marks and required performance standards to
the employee, the most important step is to measure the performance
according to the set standards over the period of time. However, this is a
difficult task for the evaluator but it has to be done. Measuring performance is
a ongoing process throughout the year and the supervisors evaluates the
performance and also keep an eye on the tasks and job responsibility. By
defining performance in terms of desired results is how managers and
supervisors make their work assignments operational. Here, it is mandatory
that choice of measuring performance method or technique should be
appropriate that personal grudge does not affect the outcome of the process
and help the employees rather than creating problems for them (Caruth &
John 2008).

Comparing the actual performance with benchmarks:

Here, the next step is comparison of actual measured performance with the
standards and benchmarks. This step is sensitive as it is dealing with the
yardsticks to compare each task with the set targets, here the employee and
supervisors should agree with the process. Comparison shows how employees

35
have achieved the set targets and what divergence has been made to the
benchmarks. This comparison tells either the performance is according to
standards, above standards or below the standards. Measuring performance,
evaluation, comparison and analysis are integral part of this step (Caruth &
John 2008).

Discussion on results:
As in process, management sets up standards and communicates those
benchmarks to employees similarly after getting the performance appraisal,
results should be communicated to the employees and they should be briefed
about the standards and the actual performance they have give. There should
be a One to One discussion on the results. The purpose of this feedback or
discussion is to make the employees aware of his performance, achievements
and short falls over a period of time but with a positive attitude. This step also
contains the notion of motivation and encouragement to employees so that
are loyal to organization and satisfied with the job as well (Caruth & John
2008).

Decision Making:
The last step of performance appraisal process is making the decision on the
bases of results taken from the evaluation step. This decision is about the
improvement of employees, training on different tasks which are lagging
behind, corrective actions, promotions and rise in salary, rewards, transfers
and demotions (Caruth & John 2008).

Selection of Performance Appraisal systems is the main part of the

performance management and measurement. The literature shows that

36
motivation, job satisfaction and employee loyalty with organization is directly
linked with the Performance Appraisal systems. In the chapter, research has
thrown light on performance appraisal and its different methods widely used
across the globe, performance appraisal process and linked strategies. By the
side it has also heighted the different performance appraisal problems that
often occur in the process or performance measurement.

Research Question:
To explore the role of performance appraisal system in HR function within the
banking sector of Pakistan.

Objectives:
 What is performance appraisal?
 What are different performance appraisal systems?
 How appraisal system interlinked with motivation and employee loyalty
within banking sector of Pakistan?
 What are different problems with performance appraisal system?
 What are different strategies in HR department to enhance productivity?

Research Paradigm:
A paradigm is a structure that helps the researcher to construct a frame work
of study. This frame work tells how to see the world and create a link within
the perspective and shape the different elements together to conduct a
research (Guba & Lincoln, 1994). Research paradigm has three types into it.
a. Ontological question (form and nature of reality)
b. Epistemological question (basic belief about knowledge and relationship)
c. Methodological question (how to go about finding the beliefs)

37
Ontology describes the reality that researcher wants to investigate in the study
and also it takes some assumption based on the reality and develops research
study. Epistemology describes the linkage and a strong relationship in between
the reality and the research study moreover epistemology has some set of
assumptions where it tells the different techniques and methods to enquire
about the reality in the real world (Guba & Lincoln, 1994).

Here researcher has defined the ontology of the conducted research as:
“In reality, performance Appraisal systems and it feedback and results has
effect on the job satisfaction, employee loyalty and motivation towards the
job.”

Here researcher is going to describe the whole methodology for the research
study through the help of research onion. This research onion tells the
research philosophy (phenomenology, systems thinking and positivism)
Research approach (Deductive and Inductive) Research strategy (Experiment,
survey, ground theory, case study, ethnography, action research and
exploratory research) Time horizon (longitudinal and cross sectional) date
collection method (literature review, interview, questionnaire, survey, focus
group and reflective diary).

Research Philosophy:
In the research philosophy, there are different types of philosophies:
phenomenology, systems thinking and positivism. Research philosophy can be
describe as “All research is interpretive; guided by set of beliefs and feelings”
(Denzin and Lincoln, 2000). It tells the different sets of assumptions and
believes that are linked to the world, i.e. how the researcher understands the

38
different aspects of the study and what the perspective of the research
conducted is. This approach philosophy helps the researcher to study the
different small elements in to details and filter the information into a different
angle. Research philosophy also helps the researcher to understand the real
meanings of the research study (Klein and Myers, 1999).

Case Study Approach:

A number of approaches are undertaken by a researcher to make the research
work more accurate and practical. One could use various research approaches
available like the: Action Research, Case study, Ethnography and Grounded
theory Project approach.

The researcher feels that case study approach is most applicable as connection
between texts and information collected can be easily obtained. It would focus
on understanding in depth the research question and at the same end it
conceptualises the various links present inside a particular frame work. Case
study approach also takes up use of entrenched designs such that various
studies can be used within a single research (Strauss and Corbin, 1990).

The approach would highly correlate with the research carried as it would
allow predicting the approach performance appraisal systems in JS Bank and at
the same time allow the researcher to understand the job satisfaction of
employees in the bank. Specific information related to the bank could be
gathered using the said approach as compared to the overall working of the
bank. A single case study was deemed suitable for research as the research
question surrounds the single notion of performance appraisal system in JS
Bank. Even the time frame associated with the research would work well with

39
a single case study in hand, thereby making the researcher to understand in
depth the research topic at the same time provide a more efficient and well
build framework (Strauss and Corbin, 1990).

Case study of banking industry of Pakistan:

Every country has a main financial regulatory body to cycle all financial
institutions; like the State Bank of Pakistan (SBP) is the regulatory body and
integral part of financial services.

Vision Statement:
“Our vision is to develop the SBP BSC (Bank) into a strong and dynamic
institution, equipped with an efficient and professional human resource base,
having the requisite technology and fully capable of providing quality service to
stakeholders, while complementing the State Bank of Pakistan in achieving its
objective”. (SBP, 2011)

Mission Statement:
“To provide reliable banking services to the Government, financial institutions,
public and to act as an operational arm of the State Bank of Pakistan”. (SBP,
2011)
The State Bank of Pakistan is taking effective supervision of all financial
institutions. This sector comprises of different categories like; commercial
banks, non commercial banks, scheduled and non scheduled banks, micro and
macro finance banks, development financial institutions, leasing and
investment banks, agro-finance institutions, brokers and discount houses,
venture capital companies, mudaraba and musharaka companies (Islamic

40
banking), stock exchange and insurance companies. Thus, SBP is carrying all
the financial services within its umbrella (SBP, 2011).

Insight to SBP's Human Resource Department:

The State Bank of Pakistan always give confidence to fresh banking graduates
to be a part of its operations to get wide knowledge of banking sector. It also
offers its employees the chance of endorsement and rotation within the bank
by posting internal jobs. This opportunity enables the employees to meet their
personal aims and objectives in their banking career (SBP, 2011). Quite few
units are working under the HR department of SBP.

The Performance Management Unit (PMU) is the main authority for carrying
performance measurement and appraisal process and suggests the employees
to increase their annual goals that will definitely smoothen their progress to
get promotional objectives and also rise in their salaries (SBP, 2011).

JahangirSiddiqui Bank Limited (JSBL):

Jahangir Siddiqui is the merger of two giant banks of Pakistani banking
industry; Jahangir Siddiqui Investment Bank Limited and American Express
Bank Limited of Pakistan (JSBL, 2011).
Vision Statement:
“To provide quality and innovative range of banking services and products to
our customers by a highly motivated team of professionals whilst maintaining
high ethical and regulatory standards thereby, generating sustainable returns
to our shareholders.” (JSBL, 2011)

41
Mission Statement
“To be a preferred partner of our customers by providing complete financial
solutions exceeding service expectations, though a single relationship via
conventional and non - conventional, conveniently accessible distribution
channels.” (JSBL, 2011)
JSBL is a big wing of Jahangir Siddiqui investment and securities and an
association of two banks. It had started its operation as a scheduled bank with
SBP on December 2006 with an innovated investment practices. The JS bank is
one of the premiers in the brokering and discounting license from the State
Bank of Pakistan. Besides the banking services, the primary objective of JS bank
is to provide quality financial solutions to all common customers of the bank.
They are issuing new and innovative products for the customers to give them
maximum ease in modernised banking (JSBL, 2011). The JS bank is performing
multiple services and activities which can be categorized as follows:
 Retail and Consumer Banking
 Treasury - Securities
 Corporate & Commercial Banking
 Investment Banking (JSBL, 2011)

These departments are providing innovative solutions with technological ease

to final customer. JSBL is also opening its branches all over the country and will
be international in the next few years (JSBL, 2011).

Insight to JSBL's Human Resource Department:

JSBL is one of the renowned banks within the banking industry of Pakistan. It is
famous for the modern technologies, customarily services and retaining of
employees. HR department is very efficient and working according to the need

42
of the organization and also fulfilling needs of employees. Below part will
discuss the HR department, its processes, developments and also the
performance appraisal systems of the bank(JSBL, 2011).

Human Resource Planning:

For the purpose of decision making about the human resource JSBL has
categories its planning into three main steps:

Step 1. On the first place it indentifies its main organizational needs and then
tries to make activities about it, what are the different possibilities to achieve
those targets and solution to all problems about work force.

Step 2. In the step two JSBL tries to remove all the huddles in the processes
and motivates the employees to achieve those targets and gives them
maximum reward in return of their efforts. Here, it makes the targets
according to their job responsibilities and requirements.

Step 3. It makes reasonable linkages between the employee goals and targets
and organizational aims and objectives (JSBL, 2011).

Job Description
A Job description document refers to a form where all of the job requirement
and responsibilities are stated. This document also contains the future
perspective job activities also. Here the sequence of job description form is
mentioned below:
 Job identification and job details
 Job summary

43
  Duties to be performed
 Immediate manager and supervision & received (JSBL, 2011)

Recruitment and Selection

JSBL is recruiting main five categories of employees for the services:
i. Higher management
ii. Middle management
iii. Trainee and internees
iv. MTO's
v. Clerical staff

Impact of Performance Appraisal

Impact of Performance Appraisal & orientation to all process and activities are
always an important part of any HR department and JSBL is investing huge
capital amount on work force. This Impact of Performance Appraisal consist of
different steps as follows:

Training:
In the first step of training, it has different activities in it:
a. After the performance appraisal, the evaluation chart shows the
different areas of employee's performance and it also indicates the
areas where employees need Impact of Performance Appraisal. This step
makes improvements in the employees performance in the future time
period (JSBL, 2011).
b. Each time management reviews the performance of employees and
suggests the training n development HRD department for the training of
employees. It also tries to make their employees capable enough to

44
 pursue the activities in the future time and enhances their abilities.
These reviews are normally on quarterly basis.
c. Operation support division always make it assure that what type of
training and orientation is needed for the employees and also whether
this training will be given by the internal staff or that have to hire
external bodies for developmental activists(JSBL, 2011).

Development:
a. Management training orientation
b. special training for new projects and improvement plans

Performance Appraisal:
Performance appraisal is structural framework allows the management to
measure the performance off the employees and suggest the improvement
plans for next time period. It's a relationship between the evaluator and
employee. It's a opportunity for the employee to shows it's all abilities in this
process and if the management and supervisor is recognising the effort then
he will tend to receive the monetary and non monetary rewards from the
organization. This rewards and recognition increases the moral and job
satisfaction and good relation with organization (JSBL, 2011). Here JSBL
management makes job targets and aims and employees try and make efforts
to achieve those targets. In the performance appraisal process JSBL have
different approaches as follows:

Traditional Approach:
The traditional approach concerned with the past performance and overall
organizational development. In the main head office all the performance at

45
local and regional branches is being reviewed. Every branch has its own targets
and object set by the main branch and liable to perform on those notes (JSBL,
2011).

Expansion Approach:
Under the expansion and developmental approach, every employee is asked to
make a Performa of his tasks and objective during the performance appraisal
time. This approach viewed the goal setting. Every employee is liable to work
on those targets and all the performance targets are reviewed on annual bases
in December (JSBL, 2011).

Performance Appraisal Process:

Performance appraisal process of JSBL consists of four main parts.
Step 1. Create mutual understanding of organizational goals and individual
aims & objectives between employees and the evaluator. What are the targets
for the following periods, how to accomplish them and how the work will be
evaluated?
Step 2. Ongoing employee performance assessment throughout the year.
Step 3. In this step evaluators measures the actual performance.
Step 4. After measuring the actual performance, evaluator compares this
performance with the bench marks.
Step 5. After comparison, management allows employees to discuss this
performance appraisal with the evaluators to removes the doubts, if any. Here
final decision is made by the evaluators about the appraisal and also sets the
reward systems based upon performance made throughout the year (JSBL,
2011).

46
Methods for Data Collection:
The researcher inclined the research to make use of both primary and
secondary form of data. Primary data such as structured and unstructured
interviews would be used clubbed with questionnaires, focus groups, surveys
etc. Use of both structured and unstructured interviews would be obvious,
however unstructured interviews would be taken up primarily as they would
further pave way for structured interviews to take place (Miles & Huberman,
1994). However the criticality of primary data would make it mandatory on the
researcher to focus heavily on it. On the other hand Hakim (1994) describes
secondary data as an “reanalysis of data collected by another researcher
including the analysis of data sets from varied sources to create area based
data sets”. Thus such an data would refer to data or information generally
gathered from previously available information such as published works,
books, journal articles, organizational related document's, web based
documents etc. The researcher would strongly focus on such kind of data,
collected from documents or information published by the organization in
consideration, journals, web based information, books etc which would
eventually aid in forming a strong base for the overall research (Hakim, 1994).

"Performance management can be defined as a strategic and integrated

approach to delivering sustained success to organizations by improving the
performance of the people who work in them and by developing the
capabilities of teams and individual contributors."

Performance management is all about improvement-synchronizing

improvement to create value for and from customers with the result of
economic value creation to stockholders and owners. The scope of

47
performance management is obviously very broad because performance
management must be viewed at an enterprise - wide level.

RESEARCH QUESTIONS AND OBJECTIVES

The objectives of a research project summarise what is to be achieved by the
study. Objectives should be closely related to the statement of the problem.
Properly formulated, specific objectives will facilitate the development of the
research methodology and will help to orient the collection, analysis and
utilisation of data. For example, realizing the two keywords performance
management and organization success, it is important for this research study
to have a particular organization that will focus in determining impact of
performance management on McDonald's success. The research objectives are
the goals to be achieved through the research.

The Research should always be based on pre-decided questions. These

questions help to focus on the research objectives. The first step in any
research is defining the problems to be studied and the questions to be asked.
(Campbell et al, 1982)

A good research question defines the focus of your research project. It helps
readers to know the specific subject matter you will be addressing. It can set
boundaries to help you figure out where to go next and defines which data you
need to collect and which methods you will use to access and analyse your
documents (Hung & Popp, 2009).

Research question needs to be answerable by the kind of study researcher

could actually conduct. The researcher doesn't want to pose a question that no

48
feasible study could answer, either because the data that might answer them
could not be obtained. (Maxwell, 2005)

LITERATURE REVIEW
Literature reviews or searches are essential steps in any research project. They
often focus on articles in academic journals although textbooks may also be
consulted. Performance management is a term, which is widely used in
organizations and in particular by human resource professionals. A generic
definition is that it is about applying processes, techniques and systems which
maintain and improve individuals' performance whilst simultaneously aiming
to improve the performance of the organization. ( Hale & Whitlam, 2000) From
the HR field Armstrong and Baron highlight the importance of performance
management being strategic, integrated (vertical, functional, HR integration
and integration of individual needs), concerned with performance
improvement and development.

The principle of setting goals for individuals which are linked to organizational
goals has a long history, evolving from merit - rating to management-by-
objectives ('MBO'- first coined by Peter Drucker in 1955), through Locke's Goal
setting Theory of 1968 (Greenberg & Baron, 2000) and finally to performance
management, which became a recognised process in the 1980's (Armstrong &
Baron, 2002).

Philpott and Sheppard (1992): "The fundamental goal of performance

management is to establish a culture in which individuals and groups take
responsibility for the continuous improvement of business processes and for
their own skills and contributions."

49
As stated by Hartle (1995), "Performance management should be integrated
into the way the performance of the business is managed and it should link
with the other key processes such as business strategy, employee
development and total quality management." Performance staff members are
at all times faced with the test of building agreement as to which workloads
are supposed to be treated the best, and categorizing which workloads should
be acceptable to experience a constrained setting. Once agreement is attained,
the essential tools and measurements have got to be in place to decide if the
prioritized workloads are meeting definite goals.

PERFORMANCE MANAGEMENT A BRIEF OVERVIEW

Performance Management is a method for creating a collective understanding
regarding what is to be accomplished and how it is to be accomplished. It is an
approach to supervising people that raise the likelihood of reaching success.
The performance management process helps the managers and supervisors to
provide feedback to the employees regarding their current performance at job
and expected level of performance (Covey 1991). It provides clear direction to
the employees about management expectations regarding their performance.
The compensation and rewarding system is also established based on the
performance of the employees over the period of time. It also assists the
organizational leadership to identify the training needs of the organization and
resolve the performance related issues. It provides opportunity to the
managers to set the performance expectations and keep proper tracking of the
employee's performance (Doorewaard and Benschop 2003). The supervisors
and managers can measure the performance outcomes by comparing it with
the performance expectation and performance appraisal can be done on the
basis of this exercise. However, it is important that management should adopt

50
the performance management practices that are consistent with the business
operation requirements and objectives of the organization (Drumm 1999).
An effective performance management process starts with defining the
performance objectives which includes tasks and results which needs to be
accomplished. It is important for the management to communicate the
objectives to the employees in order to get the desired results (Francis 2003).
Planning is also an important part of the performance management process.
Planning includes making clear to the employee how they assist the
organization to accomplish its objectives. Work together with the employees
to clarify the performance standards and make sure that there is accountability
at every stage. Employees should be made to comprehend the accountabilities
and expectations regarding their job. Clarify the behaviours which are required
from them and why. Explain them that they are accountable for taking an
active role in running and judging their performance all through the year.

Effective communication methods could be adopted for this purpose because

if the objectives and tasks have not been communicated to the employees,
they will not be able to perform according to the expectations. Once the tasks
has been communicated and employees have started putting efforts in order
to achieve those tasks then continuous performance reviews are very essential
to advise employees about their ongoing performance and management
expectations. Feedback is considered to be the most critical step in
performance management process (Gibb 2001). Give frequent informal
coaching. It involves acknowledging the good work that the employee is doing
and helping out the employee to perform up to the mark. Discover ways
through which the employee can grow and improve, and work together to
generate development plans. Rapidly communicate novel opportunities and

51
adjustments that affect the employee's job. Name clear actions that the
employee can implement so that suggestions offered are concrete. Formulate
informal observation notes (perhaps on a calendar) whenever the employee
performs a good job, make and implement development plan. These
observations will assist supervisor while reviewing the performance of
employee and filling the performance appraisal form. The supervisor can also
note down praise or complaints from consumers concerning an employee's
work (Hale 2000). The manager and supervisor can use all saved notes
regarding the employee's performance and evaluate their performance on
accountabilities and behaviours. The supervisor can invite the employee for
feedback with reference to how they performed throughout the year. They
may perhaps remind the supervisor of particular occasions of good
performance or troubles outside their control that harm their capability to do
their job well. After completion of the performance appraisal forms talk to
employee about ratings and remarks.

THEORIES OF PERFORMANCE MANAGEMENT

The fundamental structure of performance management is drawn from basic
principles of well-established motivational and learning theories. These
theories are underpinning of performance management in this research
proposal. Goal theory was developed by Latham and Locke (1979) who
highlights four mechanisms that connect goals to performance outcomes: They
direct attention to priorities; They stimulate effort; They challenge people to
bring their knowledge and skills to bear to increase their chances of success;
The more challenging the goal, the more people will draw on their repertoire
of skill. This theory underpins the emphasis in performance management on

52
setting and agreeing objectives against which performance can be measured
and managed.

Control theory focuses attention on feedback as a means of shaping behaviour.

As people receive feedback on their behaviour they appreciate the discrepancy
between what they are doing and what they are expected to do and take
corrective action to overcome the discrepancy. Feedback is recognized as a
crucial part of performance management processes.

Social cognitive theory was developed by Bandura (1986). It is based on his

central concept of self-efficiency. This suggests that what people believe they
can or cannot do powerfully impacts on their performance. Developing and
strengthening positive self-belief in employees is therefore an important
performance management objective.

Clayton P. Alderfer (1972) devised ERG theory of human needs that explained
three primary categories:
Existence: This is akin to physiology and security needs in Maslow's hierarchy
of needs. It is concerned with fulfilment of basic requirements like food,
shelter and clothing.

Relatedness: It is related to needs like interpersonal relationships, acceptance

as a member in a group/society and family relationships.
Growth: This need involves people finding the opportunities 'to be what they
are most fully and to become what they can.'
Expectancy theory developed by Porter and Lawler (1968) and it states that
motivation will be high when people know what they have to do to get a

53
reward, expect that they will be able to get the reward and expect that the
reward will be worthwhile. So this theory leads to the performance
management.

INTERVIEWS:
Interviews are an important research method. Interviews are basically
qualitative but they can become more quantitative by the use of content
analysis. The advantages of interviews are that they obtain information directly
from the people involved in the area that is being researched and can provide
insights into attitudes and perspectives. It gives opportunity to give
information of research to interviewee so he/she can give relevant information
(Zikmund, 2003). The interviewer is an integral part of the investigation.
(Smith, 1983)

SURVEYS:
Surveys obtain information from a defined population of people. They provide
more powerful data than other methods by using a combination of
questionnaires and interviews and possibly focus groups. (Zikmund, 2006)
states that the main purpose of survey in research is to collect primary data,
which is assembled specifically for the research.

54
 CHAPTER-3

RESEARCH METHODOLOGY

55
 RESEARCH METHODOLOGY
This study will now treat performance appraisals and Impact of Performance
Appraisal needs as a progressive cycle towards attaining shared human
resource and business goals. Examining the human resource environment at
IBM, the expected benefit outcomes of these practices are:

Enhanced job satisfaction and improved morale of the workforce. This is

achieved through the deployment of a formal and well-structured system that
evaluates the employee performances and provides then with rewards,
recognition and appropriate feedback for improvements. Further on the work
force is also motivated and develop itself according to the current and future
needs and challenges of the organisation.

Performance appraisal system and subsequent Impact of Performance

Appraisal programmes direct the valuable organisational resources to be
invested in the right directions. Translating the right directions into benefits
outcomes, the company can anticipate increased capacity and inclination of
the workforce towards adapting innovation and new technologies that will
subsequently result in financial gains; increased revenues, increased profit
margin.

The management should also expect reduced employee turnover, improved

business reputation, improved and innovative products, increased
stakeholders' motivation levels.

"Methodology usually refers to the general approaches to research, while

method refers to techniques for gathering evidence" (Gancian 1992).

56
Therefore "Methodology is a theory and analysis of how research does or
should proceed" (Harding 1987). Methodology is that how to apply the
methods in the research. In my research, the methodology will be based on
both, qualitative and quantitative data collection techniques. The qualitative
research aims to generate insights into situations and behaviour so that the
meaning of what is happening can be understood and it is often a useful tool
to discover research questions. Quantitative research is empirical-based on the
collection of factual data that is measured and quantified and in other words it
is the link between "cause and effect". The proposed methodology will include
both primary and secondary data collection techniques. Data collection
techniques will include comprehensive database research, highlighted data,
surveys, supplemental interviews. By using the case study in research, the
concept will be better understand. The analysis of this research is qualitative
which is used to highlight the different patterns and make it easier to
understand. In this research, the case study will be on McDonalds. The
structure of research is based on literature review. (Saunders et al 2008).

57
 CHAPTER-4

SWOT ANALYSIS

58
 SWOT ANALYSIS OF ABB INDUSTRIES LIMITED

STRENGTHS
 Superior machine vis-à-vis competition with AI Modules and latest technology.
 The strength of ABB INDUSTRIES LIMITED lies in its strong network, it has nationwide
dealer network of above 40,000 dealers and has overseas. It has also 12 business
centres located at all strategic point. It has the widest distribution network in world
more than 100 countries around the globe.

 Their product of high quality developed with latest and imported technology. ABB
INDUSTRIES LIMITED has tie up with a number of reputed companies.

 Their product range is also very large in Pick ‘n’ Carry smart cranes. And they are the
new entrant in Backhoe loader which manufactured and assembled with the latest
technology.

 ABB INDUSTRIES LIMITED is backed by a strong and reputed ABB Group. This has got
its own brand image.

 ABB INDUSTRIES LIMITED has entered in the field of material handling equipment
over 100 years then they have got experience of around a century. ABB INDUSTRIES
LIMITED has since emerged as the world largest manufacturer of Pick ‘n’ Carry
hydraulic mobile cranes and many more technological vehicles as well as robotics.

 It also has good man power with Experienced & talented professionals.

WEAKNESSES
 ABB INDUSTRIES LIMITED had not entered into whole construction equipment
industry. Their main focus is in Cranes, Compactors, Loaders & Forklifts.

59
  According to the customer survey, ABB INDUSTRIES LIMITED customers are not
happy with after sales service. From their point of view, servicing doesn’t happen on
time.

OPPORTUNITIES
 Scope of increase in market share due to emergence of new markets.

 Potential of increase in sale because of increasing concern an environment safely

among the organisation.

THREATS
 At any level ABB has no thereat other than labour unions of the companies who are
dealing with local goons etc.
 The industry is quite fragmented, in which small player play a very important role.
The built customized products with cheaper quality techniques. They are eating up
the market share of bigger players.

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CHAPTER-5

SYNOPSIS

61
 SYNOPSIS
Prior to identifying the benefit outcomes of the performance appraisal system,
it has been strongly suggested that the following outcomes can only be
possible if the performance appraisal system is effective and continuously
monitored for its developmental needs. As a brief guideline for developing an
effective performance appraisal system, the identified critical success factors
are: a- strategic approach towards management of people and their
performances, b- effective communication of human resource values and
objectives across the organisation, c- deployment of Impact of Performance
Appraisal programmes / initiatives as an integral part of performance appraisal
system, d- continued investments made in the review and monitoring of
human resource management practices and their reformation as appropriate
(Zairi and Sinclair 1995), e- clearly defined performance levels and their
interpretive explanation of these levels to the employees and most
importantly f- central placement of competency based performance evaluation
within a performance appraisal system. The potential benefit outcomes of an
effective and effectively implemented performance appraisal as suggested by
Ahmed (1999) are:

Employees are able to gain a better understanding of their job role and
performance expectations

1. Understand the job role within the wider context of the organisation.

2. Employees can understand how their performances are perceived by the

management and finding ways of improving their performance levels.

62
3. Employees can develop an understanding of how performances are
appraised, reviewed and monitored by the management.

4. Employees can also identify their weakness and strengths and self-
evaluate that what further needs to be developed. In so doing employees
also find an opportunity to formally discuss their role, opportunities for
further progression.

5. Through performance appraisals the management can gain agreement of

the employees about their understanding of their job roles and objectives
for the following year.

6. From a business / organisational perspective, the current level of

employee and his potential can be assessed. This further forms the basis
of succession planning of each employee.

7. The management can update the employee information such as his

achievements, new skill, knowledge, ability and competencies.

8. The benefit outcomes of Impact of Performance Appraisal practices are:

a) Impact of Performance Appraisal practices provide the employees
with challenges that need to be addressed for meeting performance
standards as defined by the management. Challenging job role is
one of the many motivational factors for employees.
b) Impact of Performance Appraisal practices can further ensure the
employees that they are being valued by the company that is the
reason the company is making investments in their development.

63
9. Successful Impact of Performance Appraisal provides the employees with
sense of ownership of their job role while taking pride in their
performance. The results are higher productivity, efficiency and
satisfaction rates.

Critically evaluate these practices at the examined company, it has been

assessed that these practices can only be effective if they follow a continued
process where performance of the system i.e. performance appraisal is also
reviewed, monitored and evaluated for its performance outcomes. The
recommendation is important because unless that management can't review
the performance, it can't be evaluated whether or not the system is meeting
its objectives. Furthermore, user training of the performance appraisal system
is equally important so that full benefits of the business system can be
experienced. It is further suggested that any further developments of the
performance appraisal system should involve the end user opinions and
comments so that the objectives are completely and satisfactorily met. These
recommendations gain their importance from the fact that any investments
made into the development of the systems should be done so that valuable
organisational resources are optimised and stakeholders' interest remains
intact.

64
CHAPTER-6

CONCLUSION

65
CONCLUSION

The prime purpose of human resource management function is to manage

employees at any organisation. Management of employees is a complex task
and requires extensive and perspective strategic approach to be adapted so
that the employees that come from different social, educational etc.
backgrounds are effectively productive and managed in the organisation. It is
therefore management's responsibility to make best use of employee skills,
knowledge and abilities so that they are competent enough to perform the
designated tasks. Performance appraisal is a human resource practice that is
concerned with management of employee performances. Management of
employee performance is also crucial because people are the source of
competitive advantage for an organisation (Cook and Crossman 2004). Thus
one of many benefit outcomes of effective performance appraisal is being a
business enabler for earning the competitive advantage. Other benefits of
performance appraisal are enhanced employee performances, enhanced
employee behaviour and identification of future prospects for individual
employees etc. The critiques of performance appraisal system question the
validity of the practices because these practices are believed to lay negative or
destructive affects rather than laying constructive affects on the employees'
performances. Different studies however suggested different implications.
Another human resource practice that finds its foundations in the performance
appraisal system is Impact of Performance Appraisal. Impact of Performance
Appraisal needs of employee are learnt through periodic performance
appraisal of an employee. These needs further signify towards the gap
between the current and future levels of employee performance levels that
should be filled by appropriate Impact of Performance Appraisal programmes

66
to attain the desired levels of skills, knowledge and attributes. The examination
of performance appraisal and Impact of Performance Appraisal practices at
IBM has also been critically evaluated in this study in context of their
rationality and benefit outcomes. As a result of these practices the
organisation can expect enhanced job satisfaction and improved morale of the
workforce in addition to reduced employee turnover, improved business
reputation and improved satisfaction levels of stakeholders (Adamson and
Caple 1996). Out of effective Impact of Performance Appraisal practices the
organisation can expect employees' better understanding about the
organisation, its objectives and functionality. The employees will be more
competent and accountable while performing their job through keeping a
better understanding of their job role. Employees feel more valued and show
their commitment towards showing high performances at work.

67
CHAPTER-7

LIMITATIONS

68
LIMITATIONS

A case study is a description or history of an event or sequence of events in a

real life setting. Case study protocol sets out the objectives of the research,
how the case study will support the achievement of those objectives, including
the evidence required and how the work of producing the case study will be
conducted. This methodology covers sources of evidence such as interviews,
observations, documents and records. The use of multiple source of evidence,
each with its strengths and weaknesses, is a key characteristics of case study
research.

The data collected through interviews, surveys and case studies will be
continuously analysed. Doing data collection and data analysis, according to
Merriam (1998) is "the right way" to do it in qualitative research. It is helpful,
as it enables the researcher to "focus and shape the study as it proceeds,"
through consistent reflection on the data and attention to what the data are
saying.

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 CHAPTER-8

SUGGESTIONS

70
 SUGGESSIONS & RECOMMENDATION

GENERAL ISSUES:
 ABBs must have provisions to have meeting with dealers & potential customers once
in every six months.
 All the dealers need to be monitored by the company.
 A pick ‘n’ carry smart crane model with AI module which will be equivalent to ACE in
terms of price need to be introduced in market.
 ABBs have to distribute complimentary gifts on certain occasion to promote its
products.
 ABBs service team have to meet customer on time to time basis to gain customer
confidence.
 Spare parts availability should be there with all dealers.

TECHNICAL ISSUES:
 ABB INDUSTRIES LIMITED have to do something to increase the crane speed on road.
 TRX OR F-15- There were no provision for cradle if company provide differential lock
then it increase customer utility.
 Rear and front tyres should be heavy duty according to customers
 Stabilizer pressure is less in Backhoe loader.
 Customer is facing problem in valve leakage in Backhoe loader.
 At the time of loading, temperature shown by machine will be high.

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CHAPTER-9

ANNEXURE

72
 SURVEY QUESTIONNAIRE
SURVEY OF CUSTOMERS

NAME:- _________________________________________________________________

LOCATION:- _____________________________________________________________

BUSINESS PROFILE:- _______________________________________________________

1. When you have requirement of construction equipment then how you generally search for
product which will fulfil your requirement?
a) Company websites b) Suggestions from friends & colleagues
c) Print & visual media d) Past experience

2. What you generally look into a product before finalising a deal?

a) Quality b) Features & working c) Brand image
d) Price e) After sales service

3. Please tick the product you have purchased from ABBs in last 5 years?
a) Backhoe loader b) Mobile pick & carry crane
c) Vibratory rollers d) Fork lift trucks e) Others (Please mention)

4. When have you purchased the product of ABBs?

a) 0-1 years b) 2-4 years c) 4-6 years d) 6 or more

5. Are you satisfied with the product?

a) Yes b) No

6. Are you satisfied with after sales service provided?

a) Yes b) No

7. What was the lead time of the problem to get rectified?

a) 1-2 days b) Less than a week
c) 15 days d) 1 month

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8. If you want some changes in the product then those changes will be in:-
a) Quality b) Usage & Application
c) Appearance d) Other

9. How often a dealer contact you after delivering a product?

a) Once in a week b) Once in 15 days
c) Once in a month d) More than a month

10. Do you think ABBs prices are competitive in market?

a) Yes b) No

11. Please tick marks the products of ABBs which you are not aware off?
a) Backhoe loader (Digmax) b) Hydraulic mobile pick & carry crane
c) Vibratory rollers d) Forklift truck
e) Motor grader f) Wheel loader
g) Slew crane h) Truck mounted crane
i) Tower crane j) Articulated boom crane

12. Do you think ABBs need to increase its promotion tools to create awareness of its products?
a) Yes b) No

13. Please tick mark which you feel can be an effective media for promotion of ABBs products:-
a) Printed b) Banners & posters c) Radio
d) Visual e) Sales approach

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 BIBLOGRAPHY

Website :

 www.abb.com

 www.google.com

 www.khoj.com

 www.wikipedia.com

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